Angel Investment Criteria

Start-up businesses often need external financing to grow. These new ventures frequently turn to business angel investors for capital. Angels, who are often wealthy individuals, provide early stage financing, called seed capital, for these start-up ventures. This study examines what a group of angel investors in Southern California consider when reviewing an investment opportunity, and how they prioritize their investment criteria. The study utilizes a two-phase approach consisting of a qualitative first phase and a quantitative second phase. The results of this study show that trustworthiness of the entrepreneur, quality of the management team, enthusiasm of the lead entrepreneur, and exit opportunities for the angel are the angels' top criteria

Project selection and equivalent CAPM-based investment criteria

This article shows that the Capital Asset Pricing Model-based capital budgeting criteria proposed by Tuttle and Litzenberger (1968), Mossin (1969), Hamada (1969), Stapleton (1971), Rubinstein (1973), Bierman and Hass (1973) and Bogue and Roll (1974) are equivalent. They all state that a project is profitable if its internal rate of return is greater than the riskadjusted cost of capital, where the latter is given by the sum of the risk-free rate and a risk-premium which is a function of the systematic risk of the project, itself a function of the project cost.Capital budgeting, investment decisions, capital asset pricing model, equivalence

Partnerships in Affordable Housing: The Impact of Conflicting Investment Criteria

Accessibility to housing for lower income groups in Australia has been experiencing a severe decline in the last few years. On the supply side the public sector has been reducing its commitment to the direct provision of public housing at a time when market demand has strengthened, creating substantial price increases in all sectors of the housing market and in most urban centres. One possible solution to address the problem of reduced accessibility to affordable housing has been through the development of partnerships but recent investigation of the literature (Susilawati and Armitage, 2004a) and previous research by the author (Susilawati and Armitage, 2004b) suggest that the attractions of this approach may be specious. The research reported in this paper investigates the nature and incidence of these impediments as presented by survey of a number of stakeholders who have been involved in partnership arrangements in the Queensland affordable housing sector. By means of a series of in-depth interviews, the investment criteria and the impediments to achieving the desired outcomes of the participants in the partnerships are identified. Interestingly, the incidence of conflict and diversity between partners has elicited some unanticipated outcomes and responses which have ironically strengthened the process. Some of the negativity attached to future commitment to such partnerships has been found to be the anticipation of a worse outcome than that expected from independent action

INVESTMENT CRITERIA SET BY VENTURE CAPITALISTS

Different funders, like bankers, business angels or venture capitalists, put the accent on various investment criteria while making investment decisions. Entrepreneurs need to be familiar with these criteria or different requirements of potential investors in order to adjust their business plans. Motivated by the phenomenon of venture capital, numerous researchers worldwide are trying to identify the venture capitalists’ investment criteria. Despite the large number of studies, there is still no unambiguous answer to what the key venture capitalists’ investment criteria are. This paper provides an overview of research about investment criteria set by different suppliers of capital with a special emphasis on venture capitalists’ investment criteria. The most used VCs’ investment criteria discussed in the literature are identified and analysed in order to provide a new set of VC investment criteria

Institutional investment in Central and Eastern Europe: investment criteria of Western portfolio managers

This study provides detailed evidence on the transistion state of Central and Eastern Europe (CEE) countries. It draws on data from a survey conducted among portfolio managers of Western investment funds thereby making use of the knowledge of experts in CEE markets. The approach of the study is two-fold : First, criteria for portfolio investment and current barriers to higher investment in CEE countries are identified. Second, the CEE portfolio structure is explained making use of detailed grading data from the survey. The results suggest that a reduction in general and macroeconomic risk tends to increase investment and that the potential of high returns and low risk from the setting of financial markets contributes to signifficantly higher investment in some countries. --Central and Eastern Europe,institutional investors,portfolio investment

German Venture Capitalists Investment Criteria Over Financing Stages

This study empirically explores the respective importance of a variety of criteria relevant for the investment decision of German venture capitalists. We find that the relative importance of criteria varies with investment stages. In all stages, however, criteria in the personality of management category as well as the appreciation potential of the acquired equity stake are considered crucial. Irrelevant are various market characteristics, dividend potential, as well as the desired independence level of management. Thus, this analysis provides all participants in the venture capital (VC) process with a comprehensive understanding of the parameters underlying the VC investment decision in Germany